Consumer confidence stagnates near two-year low

Confidence among U.S. consumers stagnated in September near a two-year low as the share of households saying it was difficult to find a job climbed to the highest level in almost three decades.
The Conference Board’s sentiment index increased to 45.4 from a revised 45.2 reading in August that was the lowest since April 2009, when the economy was in a recession, figures from the New York-based, private research group showed last week. A report on home prices showed values dropped less than forecast in the year ended in July.
The confidence reading signals hiring hasn’t improved after the world’s largest economy failed to create jobs in August and the unemployment rate held at 9.1 percent. Plunging stock prices and concern the crisis in Europe will undermine the global recovery may also be shaking Americans’ resolve, raising the risk that spending will cool during the holiday shopping season.
“Consumers remain very concerned about income, employment and the state of the economy,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston. “All of these factors point to even weaker labor-market conditions as we get closer to the end of the year.”
The S&P/Case-Shiller index of property values in 20 cities fell 4.1 percent in July from the same month in 2010, after a revised 4.4 percent drop in the 12 months to June, the group said. The median forecast of 28 economists surveyed by Bloomberg News projected a 4.4 percent decline. Values were little changed in July from the prior month after adjusting for seasonal changes, the same as in June.
Investigations into bank foreclosure practices caused lags in processing that may have helped stabilize prices in recent months, economists like Celia Chen said. Values may soon resume their slide as the holdups dissipate, putting more houses onto the market and pushing back any recovery in the industry that precipitated the last recession. “Due to foreclosure processing delays, fewer distressed sales are occurring relative to normal sales,” said Chen, a housing economist at Moody’s Analytics Inc. in West Chester, Pa. “With more distressed homes likely to be sold in coming months, house prices will depreciate further before they stabilize.”
The Bloomberg Consumer Comfort Index dropped in mid-September to the weakest point since the recession ended in June 2009. The Thomson Reuters/University of preliminary index of consumer sentiment rose this month from a two-year low.
The Conference Board’s data showed a measure of present conditions declined to 32.5, the lowest since January, from 34.3 in August. The measure of expectations for the next six months rose to 54 from 52.4.
The share of consumers who said jobs are currently hard to get increased to 50, the highest level since May 1983, from 48.5 in August. That may signal a worsening of the September employment data.
Confidence dropped in six of nine U.S. regions, according to last week’s report.
The percent of respondents in the Conference Board survey expecting more jobs to become available in the next six months rose to 12 from 11.8 the previous month.
The proportion expecting their incomes to rise over the next six months decreased to 13.3, the lowest since October, from 14.3 in August.
“We all know that the economic uncertainty that we’re seeing in the world today is putting pressure on consumers,” Mark Parker, chief executive officer of Nike Inc., the world’s largest sporting-goods company, said on a Sept. 22 conference call with analysts. “Some consumers have returned to higher-end goods while others are trading down or cutting back.” &#8226